Weekly Market Recap – July 9, 2021
Thirty-two million Americans are under excessive heat alerts, due to the high-pressure dome causing record temperatures in seven states in the West. California has ordered power and water preservation measures. The COVID-19 global death toll has passed 4 million. In the U.S., a spike in outbreaks is being attributed to the Delta variant, which is now the most prevalent strain of coronavirus in the nation. Twenty-five states have reported an uptick in cases, a 21% increase from the previous week.
The calendar for government economic reports was fairly light. The statistics, compared to prior levels: wholesale inventories rose 1.3% (vs. +1.1%) consumer credit rose 10.0% (vs. +5.7%), and initial jobless claims were 373,000 (vs. 371,000).
Interest rates were the focus in financial markets, as the 10-Year Treasury Note fell to 1.29%, its lowest level since late March (1.75%). Inflation concerns have subsided, as the Fed watchers inferred that an overheated economy this year is less likely than expected. All three stock market indices we track in our recap closed at record highs on Friday: DJI at 34,870.16 (+0.2%), S&P 500 at 4,369.55 (+0.4%), and NASDAQ at 14,701.92 (+0.4%). CBOE’s VIX snapped out of its downtrend, trading as high as 20.65 on Thursday. When the dust settled, the volatility index closed at 16.18 on Friday, up 7.4% for the week. The U.S. Dollar Index backed off to 92.10 (-0.2%), and the S&P GSCI eased to 531.75 (-1.8%).
Metals markets were mixed. Futures settlements and weekly changes were as follows: gold at $1,810.60 (+1.5%), silver at $26.234 (-1.0%), platinum at $1,094.40 (+0.8%), palladium at $2,812.00 (+0.7%), copper at $4.3455 (+1.6%), and aluminum at $2,483.5 (-2.3%).
Energy futures were volatile due to uncertainty emanating from the OPEC meeting in Vienna. Seesaw trading around this issue widened the movement to a $6 range during the week. Both crude oil benchmarks we cover, WTI and Brent, ended only 0.8% lower: the former closed at $74.56 (-60¢) and the latter at $75.55 (-62¢). U.S. refined products weakened, as well. Heating oil lost 1.1%, closing the week at $2.1552, and RBOB gasoline slipped 0.3% to $2.2920 per gallon. Natural gas, down 0.7% for the week, ended at $3.674 per mmBtu.
Turning to the agricultural markets, we saw a week with more declines than increases. Six of the nine products we feature here moved downward. The settlement prices on the negative side were as follows: November soybeans fell 5.0% to $13.29¼, December corn had a 10.8% sell-off to $5.17, September wheat dropped 5.8% to $6.15 at the close, July coffee lost 1.0% to 151.50, October sugar retreated 4.8% to 17.28¢, and live cattle ended at 119.225 (down 2.3%). The three winning contracts were cocoa at $2,347 per ton (+1.2%), December cotton at 87.71¢ (+0.9%), and lean hogs at 101.575 (+1.3%).
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